Employment law is very much en-vogue. You can hardly open a paper or watch the news without hearing about another gig-economy employment case, a Government review into employment status, the Supreme Court considering the legality of tribunal fees or changes to national insurance for the self-employed.
Employment law is constantly changing. There is probably more focus on employment status at present than at any time in the recent past.
The definition of an employee will differ depending upon whom you ask. In health and safety case, an employee will be entitled to greater protection (and so the definition is very wide). The definition is probably narrower in employment law terms and more narrow still when determining how an individual is taxed.
When determining employment law rights – the definition of employee is of significant importance. Employees are entitled to far greater protection than the self-employed (or “workers”). Employees alone have the right to claim unfair dismissal, redundancy pay and maternity and other family leave and pay.
Employees also benefit from the protections afforded to “workers” (a hybrid EU concept wider than employee but not self-employer). Workers (and employees – as all employees are workers) have the right to the national minimum wage, holiday pay, whistleblowing and discrimination rights. The self-employed do not benefit from these protections.
By contrast those who are self-employed have tended to benefit from a more favourable tax and national insurance regime.
Recent employment tribunals have considered the status of individuals providing services to the public through Uber (drivers) and Deliveroo (couriers). Both emphatically concluded that those providing the services were workers (they were not determining employment status) rather than genuinely self-employed as the businesses had purported (and their detailed and clever contracts claimed).
This meant that Uber drivers and Deliveroo couriers were entitled to the minimum wage whilst working, paid holidays and had the right to bring discrimination claims.
The legal test to determine employment status is a multi- factorial test that considers various factors including control, personal service, the level of integration, the level of risk, mutuality of obligation and the level of control or autonomy. However, in reality the tribunals have a tendency to utilise the duck test (i.e. if it looks like and it quacks like….)
The Government is reviewing self-employment and is proposing to report in the Autumn (in time for increased national insurance contributions from the self-employed, probably in exchange for increased rights).
However, what we are seeing is that the old tests are not necessarily appropriate for today’s more flexible, variable workforce. The test of who was employed (the old “master and servant” tests) no longer necessarily fit today’s agile, autonomous workforce.